HC Deb 27 July 1954 vol 531 cc434-41

Lords Amendment: In page 66, line 42, leave out paragraph 2 and insert: 2.—(1) Nothing in this Act shall prevent the recovery from a tenant who retains possession of a dwelling-house by virtue of section six of this Act of any amount due under section six of the Leasehold Property (Temporary Provisions) Act, 1951, in respect of work executed on the dwelling-house; but where any such amount is recoverable by the landlord (as defined by subsection (1), and the proviso to subsection (4), of section twenty-one of this Act) it shall be recoverable in accordance with the following provisions of this paragraph but in no other manner. (2) The amount shall be treated for the purposes of this Act as a payment for accrued tenant's repairs, and accordingly the question whether any and if so what amount is due as aforesaid shall be deemed to be included in the matters specified in paragraphs (b) to (d) of subsection (2) of section seven of this Act. (3) Sub-paragraph (6) of paragraph 4 and paragraph 12 of the First Schedule to this Act shall apply in relation to the amount as they apply in relation to expenses incurred by the landlord in ascertaining what initial repairs are required in consequence of failure by the tenant to fulfil his obligation under the former tenancy.

The Solicitor-General

I beg to move, "That this House doth agree with the Lords in the said Amendment."

Members of the Standing Committee will recollect that my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) moved an Amendment to Clause 10 to ensure that the relief given by that Clause to the tenant who remains in the premises as a statutory tenant should not extend to any liability for failure to pay other outstanding charges besides rent and rates. He feared that without some Amendment Clause 10 might make it impossible for local authorities to recover various sums charged on the property like stree works and things of that nature. I undertook to look into the point, and I am satisfied that my right hon. and learned Friend's fears as to he effect of the Clause without Amendment are groundless.

In the course of examining the position this defect in the Ninth Schedule was discovered. It is rather a complicated matter, but I think the House will agree with this substantial Amendment when I make it clear why it is necessary to make it. The House will remember that under Section 5 of the temporary Act tenants were protected from eviction for failure to comply with covenants to repair by preventing the landlord from enforcing the covenants in the lease. By Section 6 the landlord was enabled to enter on the demised property and carry out essential repairs required in consequence of he tenant's default. The Section gave him a right to recover from the tenant the expenses incurred in doing so, but the enforcement of the right to recover was suspended so long as the tenant remained in occupation.

By this Bill both Sections 5 and 6 of the temporary Act will be repealed when the Bill comes into operation with the result that, apart from any specific provision in the Bill, the landlord could then enforce the right of recovery acquired by him under the temporary Act. As part of the scheme for giving the tenant security of tenure, Clause 16 protects him from eviction for failure to comply with the repairing covenants in his lease. The protection also extends to actions for damages, including, by virtue of Clause 16 (5), actions for the recovery of expenditure incurred in consequence of a breach of covenant.

As the Bill stands, the protection of Clause 16 is excluded by paragraph 2 of the Ninth Schedule in relation to amounts recoverable under Section 8 of the temporary Act. On the other hand, in so far as the liability to pay such an amount may be a liability arising under the lease it is extinguished by vir[...]ue of Clause 10 on the conversion of the former tenancy into a statutory tenancy.

It is a somewhat complicated position. The Bill as it stands may operate harshly on the tenant and it may also be unjust to the landlord. It may be harsh on the tenant because, while his long tenancy continues, the effect of Sections 5 and 6 of the temporary Act will be that liability for repairs executed under that Act can be enforced. It will be unjust to the landlord because when the lease has been converted into a statutory tenancy the right which he has to recover payment at some time in the future for repairs, which he is entitled to exercise under the temporary Act, may be extinguished. There is really no reason why the position of the tenant whose landlord has made use of powers conferred by Section 6 of the temporary Act should be so different from that of the tenant whose landlord has done nothing.

Clause 16 was inserted in the Bill because the security which Part I was to give a tenant after his tenancy has come to an end would be illusory if he could be evicted for failure to repair before the expiration of his term. This is true no less of a tenant whose landlord has acted under the temporary Act than it is of any other tenant. On the other hand, it is manifestly unjust that a landlord who has carried out essential repairs on the faith of Section 6 of the temporary Act, which gave him the right to recover his expenses, should lose his right after the tenant has become a statutory tenant. That is the difficulty which has come to light. It was harsh to the tenant in certain cases and unfair to the landlord in others.

The Amendment, therefore, proposes to treat expenses incurred by the landlord in carrying out repairs due to the tenant's default before the tenancy comes to an end in the same way as expenses incurred by the landlord in respect of initial repairs after the machinery of Part I has been brought into play. It achieves this by treating the amount recoverable under the temporary Act as a payment for accrued tenant's repairs, and by excluding recovery by action before the tenancy comes to an end.

To do this it is necessary to ascertain the amount due under the temporary Act and determine the method of its payment before the beginning of the statutory tenancy. These matters will therefore have to be included in the "proposals for a statutory tenancy" which the landlord is required to include in his notice, served under Clause 4. The form prescribed for this purpose will ensure that the point is not overlooked by the landlord or his advisers.

Paragraph 2 (3) in its new version makes the necessary adjustment in the First Schedule in order to ensure that the landlord does not suffer a diminution in his right to recover the amount due to him under the temporary Act where his interest comes to an end or the payment for initial repairs is reduced owing to some of the repairs becoming unnecessary.

I apologise for this lengthy explanation at this early hour of the morning, but the position with which we sought to deal is somewhat complicated and might operate in some cases unfairly on the landlord and in some cases unfairly on the tenant. By proposing this solution we think that we have arrived at a fair compromise.

Mr. E. Fletcher

I think that the whole House will agree with me when I say that it was quite unnecessary for the Solicitor-General to apologise for his very full and adequate explanation of this very complicated and important Amendment. It is by no means the least important of the Amendments made to the Bill in another place. We are very grateful to the Solicitor-General for giving us such a very full explanation of what this complicated provision is designed to secure.

I say that because those who have studied the Reports of proceedings in the House of Lords will not have overlooked the fact that when the Amendment was proposed in their Lordships' House the Government spokesman said that he did not propose to explain the Amendment because he did not think he could explain it correctly.

Mr. Speaker

Order. The hon. Member is referring to debates in another place and we must beware of that.

Mr. Fletcher

I was quoting what was said by the Government spokesman in order to show that where that happens in the House in which the Amendment is introduced, it is not a matter of apology but a matter of necessity that the Government spokesman in this House should give a very full explanation of what is intended. Not only members of the legal profession, but still less members of the public, could not be expected to understand the significance of this change in the Ninth Schedule unless a complete and coherent explanation were given of what it is intended to achieve. We are nearing the end of the Bill and we have had occasion to criticise the Government in some respects. On this occation I am delighted to take this opportunity of thanking the Solicitor-General for his lucid explanation.

I found it a little difficult to pick up the precise significance of it as the right hon. and learned Gentleman went along, and as he expounded it two or three questions were raised in my mind. He said that the Bill without the Amendment would involve a certain measure of hardship, in some circumstances to the tenant and in some circumstances to the landlord. The Bill as unamended would have this curious result: the rights under Sections 5 and 6 of the temporary Measure, which were suspended, would not revive unless specific provision were made in the Ninth Schedule for their revival. The question is in what form should they be revived so that they would involve hardship and injustice to neither the tenant nor the landlord?

Broadly, the effect of this long and complicated Amendment is to revive provisions under the temporary Act of 1951 which enabled a landlord to do repairs but took away from him the right to recover payment from the tenant. They are treated as being added to the repairs which, under this Bill, if the long lease comes to an end and the occupation becomes a tenancy, comprise one of the things for which he can claim.

I ask the Home Secretary to give us an assurance. A moment or two ago an Amendment was introduced giving the landlord the right to seek a termination of the tenancy if certain repairs were not done by the tenant—not merely to recover from the tenant but to bring the tenancy to an end. The House is entitled to an assurance from the Home Secretary that this provision affecting the Ninth Schedule, which gives the landlord the right to treat these payments as equivalent to expenditure on repairs, adds in no way to the risk of the termination of the tenancy if there should be default on the part of the tenant in making any payment due to be made. In other words, the principle for which we contend is that the grounds on which a tenancy should come to an end should be strictly limited, whatever the monetary rights about payments for repairs. We are anxious to make it clear beyond all doubt that there is nothing in this new and somewhat complicated section which adds to the grounds on which a tenant can be deprived of his tenancy.

The second point is this. The learned Solicitor-General referred to a "prescribed form" which is to be used under these new provisions, but it was not clear to me from what he said as to whether that prescribed form is to be prescribed as a result of this Bill passing into law. I did not understand that. If he means a form under the provisions of Clause 4, then I would ask for an assurance that, in the form of notice to be prescribed it shall be in such detail, and with such clarity, that it is made perfectly clear to any tenant affected by this most complicated section, exactly what are his rights in this intricate procedure.

1.15 a.m.

Sir D. Maxwell Fyfe

On the first point which the hon. Gentleman raised, I think that he will appreciate the difficulty which my right hon. and learned Friend the Solicitor-General described. As a result of the repeal of Sections 5 and 6 of the temporary Act the Bill as it stands becomes harsh to the landlord when a long tenancy is converted into a statutory tenancy.

But, on the second point of his first specific question to me, I would say that the landlord has no better remedy for this than for any other payment for the tenant's repairs. That is dealt with in paragraph 17 of the First Schedule. The non-payment of an amount for these repairs gives the county court judge the right to order possession. But this gives no more favourable position and confers no extra power. As to the form of notice, this is under Clause 4, and the Solicitor-General has stated, and I repeat it, that the form will be such as to ensure that the point mentioned is not overlooked. I think that that deals with the points raised and, on behalf of the Solicitor-General, I thank the hon. Gentleman for the compliment which he expressed.

Lords Amendment: In page 67, line 32, at end insert: (2) Where a tenant under a tenancy which was current at the commencement of this Act would but for this sub-paragraph be entitled both to—

  1. (a) compensation under section thirty-seven or section fifty-eight of this Act; and
  2. (b) compensation payable, under the provisions creating the tenancy, on the termination of the tenancy,
he shall be entitled, at his option, to the one or the other, but not to both.

The Solicitor-General

I beg to move, "That this House doth agree with the Lords in the said Amendment."

One of the objects of the Bill is to provide compensation for tenants under certain circumstances when they do not get a renewal of their tenancies. In certain leases there are provisions for compensation, particularly leases granted by statutory undertakers for a term of years with power for the landlord to terminate it at any time on, say, six months notice if the premises are required for the purposes of the undertaking.

It may be that the amount of the compensation under the lease is greater than the amount he could obtain under the Bill; it may be the other way on. The purpose of the Lords Amendment is to secure that while the tenant should not be entitled to compensation twice over, under both the Bill and under the lease, he should have the choice of electing which compensation he will take, the one under the Bill or the one under the lease. Presumably, when he has that exercise of election, he will take the compensation which is greater.

Mr. Skeffington

I raised this point once or twice in Committee, and I am grateful that the matter has been dealt with, and that it has been made perfectly clear that double compensation will not be possible. I think that this is a very desirable Lords Amendment.